A company sells merchandise to a customer on credit. The journal entry that the company makes to record this sale would include a credit to a sale account.
The credit journal entry refers to journal entry which is recorded by the company in its sales journal when the firm makes any sale of the inventory to a third party on credit. Then, the debtor’s account or account receivable account is debited with corresponding credit to the sales account.
A credit entry is used to decrease the value of an asset or increase the value of a liability.
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